Travel and leisure companies were some of the stocks that were most adversely affected by the coronavirus pandemic in 2020, and they subsequently faced substantial declines in consensus earnings estimates during the year.

While air travel, hotel bookings and restaurant reservations are still well below where they were one year ago, they are improving and are at their highest levels since pandemic restrictions were put into place. The latest stimulus package, acceleration of vaccine distribution and rising vaccination rates are brightening travel and leisure company prospects.

The latest stimulus bill provides $1,400 to many American consumers, who may decide to spend some of that money dining out or getting on a plane to visit family, friends or a new destination. Certainly, the travel and leisure recovery trend faces ongoing headwinds, and setbacks are possible as it may take time for consumers to get back to their pre-pandemic routines. It seems clear that there is plenty of pent-up demand for travel and leisure activities—we could all use a vacation after a difficult, isolating year.

Companies that are principally engaged in the design, production or distribution of goods or services in the leisure and entertainment industries may be worth examining as the recovery accelerates.

Our starting point for this month’s First Cut uses AAII’s Stock Investor Pro to look for travel and leisure companies that have received any upward revisions over the course of the last month in their consensus earnings estimates from analysts for the current and next fiscal year. We screened to make sure analysts have not lowered estimates for the current or next fiscal year during the past month.

The next filter eliminates those firms with less than five estimates for the current fiscal year, helping to ensure that revisions actually reflect a change in general consensus, not just a change by one or two analysts. The 20 travel and leisure firms with the greatest percentage increase in estimates for the current fiscal year are listed in the table below.

Leisure Stocks Passing the Estimate Revisions Up Screen
(Ranked by Current-Year Revisions Made Within Past Month)

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